Crafton says it has invested over $100 million in India and wants to be more than just a gaming company – Meczyki.Net

Crafton, the brand behind some of the world’s most popular video games, says it invested $100 million in the Indian market two years ago in the South Asian nation and is set to launch several new titles in the country.

The four-year-old South Korean firm, which went public last year, gained popularity with its shooter game PlayerUnknown’s Battlegrounds – commonly referred to as PUBG. The title, PUBG Mobile, became the most popular mobile game in the country, with over 50 million monthly active users in India, until it popped up on the list of apps New Delhi ordered a halt to national security concerns.

Unlike most of the other firms on the block list, Crafton has been able to re-launch a new title in India – called Battlegrounds Mobile India. The game, which was released in India in July last year, shares many similarities with PUBG Mobile, though the developer claims that it has made several changes to address local concerns.

In November, Crafton brought PUBG: New State to its new game based on the same last-man-standing gameplay, also known among gamers as battle royale, which is available on BGMI and PUBG Mobile. That new offering was renamed to New State Mobile in January – as a hassle-avoidance strategy for the issues raised against the first PUBG title.

In an extensive interview with Meczyki.Net, Sean Hyunil Sohn, India CEO of Crafton, said that New State Mobile has not grown as fast as BGMI and its retention is not as strong. He also noted that BGMI complies with local regulations in India, where the company employs about three dozen people, 70% of whom manage its publishing operations.

The company has a lot more to offer to the country, including investing in local startups.

Crafton’s investment in India so far

  • $22.5 million in Nodwin Gaming in March 2021
  • $9 million in locos in June 2021
  • $48 million in copy in July 2021
  • $6.5 million in Frnd in December 2021
  • $5.4 million in Nautilus Mobile in February 2022
  • $7 million in Kuku FM in March 2022
  • An undisclosed amount invested in Leela Games in March 2022

Crafton’s India team (Image credit: Crafton India)

Edited excerpts from the interview below.

How much is Crafton able to spend out of its $100 million investment in India announced in 2020?

We have reached our goal and have already spent $100 million beyond our original investment plan. We’re working on two-three deals, which should hopefully convert in August, giving us about $140 million to be invested in the country. Altogether there have been around eight investments in the last one and a half years. We will continue to invest in gaming, gaming and tech startups in the country. In 2022, we can invest $100 million or more in total in the Indian market. Though we have not created any separate fund for the Indian market, we are investing from our balance sheet. We have been a profitable company, especially after the IPO, and have $2.5 billion on our balance sheet. We are investing in multiple markets and India is part of this global investment strategy. However, in India, we have a slightly wider scope, given that it is a rapidly growing market with many promising industries.

What are the key aspects you consider while making an investment decision in India?

One of the main concerns is the product and the location the company operates in. Be it gaming, gaming related or working in the media and entertainment sector or digital space – these are the three pillars we focus on. For example, NodeWin and Loco are not gaming studios, but a part of the gaming ecosystem that we are interested in. CC and Kuku FM are not related to gaming, but they are interesting to consumers and host original ideas or content. Other companies we invested in include Nautilus Mobile and Leela Games which are game developers in India. We are also interested in original IP made by India, which are expandable.

So, is it that you’re not limited to companies that align with Crafton’s goals or are making things that can be complementary to your games?

We want to be bigger than just a gaming company. We essentially want to bring an experience rooted in gaming, but we want people to enjoy the content and have fun across different platforms. We have pilot projects in development, which are new projects and not games at all. We have some metaverse projects based on web3 where creators can work with our platform and tools and experiment. It is at a very early stage at the moment.

Are these Metaverse projects aimed at gamers or content creators?

We need to understand whether these platforms are suitable for professional creators or young people who have just started creating. If you look at games like Minecraft, it can be used there, and the level of development can vary greatly. We have yet to see, although this may be expanded in the future.

We see a lot of startups in the metaverse space in India. But a lot of them are using “metaverse”, “nft” and “web3” in their pitch notes – perhaps to attract investors or achieve short-term success in the market. How do you see that trend?

Crafton has some investments, and we have announced one for Web3 in India. We are also in the process of closing other small investments. Apart from India, we have invested in Web3 in other markets as well, but they are again making small investments. We need to know more to see what’s working and what’s not, and we want to be part of this experiment, which is why we’ve invested in small amounts. Having NFT elements in a game doesn’t necessarily make it fun. It needs to be developed into a pleasant experience for the players. While new gameplay elements are to be explored, we are yet to see it develop and are not following its development closely while maintaining it as our main focus. Web 3 alone cannot make a fun game, so one needs to know how to make a good game and incorporate technology to enhance the gameplay experience.

What are the key things you look for in a founder and team before signing a deal?

We have invested in game studios for the last 10-12 years. Earlier, there was only one studio – Bluehole, but now, we have eight-nine gaming studios. Not all have been successful, but we have learned some great lessons from all of them. We believe in our ability as a team, and want to share our collective experience to achieve greater success. When investing in India, we look at the team’s past experience and time spent in gaming development. There are few companies in India who have made the game, and earn a decent revenue to retain their team. We work to harness local forces, for example, Nautilus Mobile and the cricket sports games they create. While they are not yet globally renowned, we think we can spur further development with funding and support.

You talked about the new games that you are planning to introduce in India. Will they be from the battle royale genre or based on some other format?

We have planned different games for India. We may bring to the country one of our games launched in Germany with some localization. Our studios Risingwings and Dreammotion are also making games that can be suitable for the Indian market. Similarly, Striking Distance, a subsidiary of Crafton, is making PC games that may be relevant to Indian consumers but won’t be as big as BGMI.

Sean Hyunil Sohno

Sean Hyunil Sohn, CEO, Crafton India (Image Credit: Crafton India)

What is the total amount of time and money spent on BGMI?

As a company, we do not announce KPI numbers specific to India. The game has been very successful for the past year, and there has been a steady improvement in registrations and revenue. We recently announced the number of registrations on BGMI, which has crossed 100 million users.

What has been the biggest season of the game so far?

BGMI is a free-to-play game. We want to keep the game life as long as possible, so we keep introducing new content, updates, and in-game features to keep the game fresh. Some Royale passes perform better than others. The most recent one was an Egyptian theme called Sky Islands, which performed very well.

Can you share some details about Crafton’s investment in The Leela Games?

Leela Games has three founders, two from America and one from India. The Creative Director and CEO are from the US, but their engineering capabilities are local. We believe this synergy combining global and local learnings can lead to a successful enterprise. They have been making cricket game for the last seven-eight years. And then they showed some good metrics. Ironically, they’re making shooter games – perhaps battle royale games – for casual users. This can also be an interesting approach.

Since Leela Games is also working on something for the battle royale category, how do you make sure it’s not something that could bring a conflict of interest issue?

The gaming market in India is huge, and unless something similar to BGMI is built, it’s not a conflict of interest. We see new, good quality products developing as a pleasant addition to the market. Also, given that the target audience is different, we don’t see any conflict yet.

Anish Aravind, who was leading the BGMI team, left Crafton in February. Who is leading the team now?

Anish left a few months ago, although all the other team members are still with Crafton. Minoo Lee is the Head of Publications for BGMI at Crafton. He supported the local team in launching BGMI in India and is familiar with the sport and every element of the team. Currently, Menu acts as a bridge between global and local teams and can help launch new products and sports in the country.

What is the status of New State Mobile in India?

New State Mobile is not as big as BGMI. It had a lot of numbers at the initial launch, but its retention is not as strong as the BGMI. Nevertheless, we will keep adding new content to New State Mobile. Due to hardware limitations, India may not be the main target for New State Mobile, but it has great graphics, and we will continue to serve the game.

Some reports claim that parents have lost lakhs of rupees as their children made in-app purchases on BGMI using their credit and debit cards. Some reports also alleged that some people were killed due to excessive addiction to the game. These issues eventually plagued PUBG Mobile in India in the past. So, how is Crafton looking at all these issues this time around?

Crafton launched the ‘Game Responsible’ campaign, and we are the only major gaming company in India to take these measures. We also have game hours limits, spending limits, and login security measures built into the game. The game is hugely popular, and these issues come with the territory. We don’t know the details of the fraud and how it was done, but these are extreme cases. We continuously work towards achieving a safe gameplay experience for the users.

There are some concerns about how Crafton got approval for BGMI just months after the government banned PUBG Mobile as the two games share many similarities. An MLA also questioned in Parliament last week whether PUBG Mobile has made a comeback in India. How would you react to these concerns?

The government does not interfere in which apps can and cannot work. They address digital security and privacy concerns, and BGMI complies with all guidelines. MeitY (Ministry of Electronics and Information Technology) has also noted that PUBG and BGMI are different games. We understand that the government is concerned about the playing habits of gamers, and this is where BGMI has incorporated safeguards.